When someone passes away, questions may arise about the division of assets. If the person has a will, then the answers likely exist in the wording of the document. Florida probate courts will oversee the division of assets based on the decedent’s wishes. Not every asset the decedent possessed may need to go through probate, however.
Would the decedent’s individual retirement accounts go through probate? The answer depends on whether the individual named a beneficiary. A beneficiary is the named person who receives the money in an IRA, mutual fund, bank account or other type of monetary account after the primary account holder’s death. Sometimes, a single person is named as the beneficiary, or more than one person is. For example, two people could receive 50% each from the IRA account.
Also, the IRA could designate someone to receive the funds if the beneficiary dies before the primary holder. Of course, the primary account holder can change the beneficiary designation at any time.
What about probate? Beneficiary designations allow funds to transfer outside of the cumbersome probate process. When no beneficiaries exist on the account, then the IRA would go through probate. However, state laws do differ. In some states, a spouse could have claims on the portion of the funds regardless of beneficiary designation.
A meeting with an attorney may help beneficiaries and those named or executing a will understand state law and their duties and obligations. These duties may include paying debts or filing any inheritance or estate-related taxes.
An attorney might also assist with probate and estate administration after someone passes away. The attorney may be able to clarify obligations to creditors or defend a client against a creditor’s claims.